Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 26, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | INTERNATIONAL FLAVORS & FRAGRANCES INC | |
Entity Central Index Key | 51,253 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 79,591,844 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 539,992 | $ 181,988 |
Trade receivables (net of allowances of $9,425 and $8,229, respectively) | 621,164 | 537,896 |
Inventories: | ||
Raw materials | 273,424 | 265,209 |
Work in process | 19,320 | 17,450 |
Finished goods | 291,745 | 289,388 |
Total Inventories | 584,489 | 572,047 |
Prepaid expenses and other current assets | 183,789 | 145,178 |
Total Current Assets | 1,929,434 | 1,437,109 |
Property, plant and equipment, at cost | 1,850,356 | 1,812,283 |
Accumulated depreciation | (1,113,003) | (1,079,489) |
Total Property Plant and Equipment | 737,353 | 732,794 |
Goodwill | 940,544 | 941,389 |
Other intangible assets, net | 288,837 | 306,004 |
Deferred income taxes | 139,023 | 166,323 |
Other assets | 119,437 | 118,391 |
Total Assets | 4,154,628 | 3,702,010 |
Current Liabilities: | ||
Bank borrowings and overdrafts and current portion of long-term debt | 133,473 | 132,349 |
Accounts payable | 255,143 | 285,501 |
Accrued payroll and bonus | 49,053 | 48,843 |
Dividends payable | 44,588 | 44,824 |
Other current liabilities | 205,994 | 213,639 |
Total Current Liabilities | 688,251 | 725,156 |
Long-term debt | 1,357,684 | 935,373 |
DEFERRED GAIN | 41,630 | 43,260 |
Retirement liabilities | 244,223 | 242,383 |
Other liabilities | 144,908 | 160,849 |
Total Other Liabilities | 1,788,445 | 1,381,865 |
Commitments and Contingencies | ||
Shareholders' Equity: | ||
Common stock 12 1/2¢ par value; authorized 500,000,000 shares; issued 115,858,190 shares as of June 30, 2016 and December 31, 2015 and outstanding 79,640,930 and 80,022,291 shares as of June 30, 2016 and December 31, 2015 | 14,470 | 14,470 |
Capital in excess of par value | 140,355 | 140,802 |
Retained earnings | 3,750,364 | 3,604,254 |
Accumulated other comprehensive loss | (608,310) | (613,440) |
Treasury stock, at cost - 36,217,260 shares as of June 30, 2016 and 35,835,899 shares as of December 31, 2015 | (1,623,007) | (1,555,769) |
Total Shareholders' Equity | 1,673,872 | 1,590,317 |
Noncontrolling interest | 4,060 | 4,672 |
Total Shareholders' Equity including noncontrolling interest | 1,677,932 | 1,594,989 |
Total Liabilities and Shareholders' Equity | $ 4,154,628 | $ 3,702,010 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Trade receivables allowances | $ 9,425 | $ 8,229 |
Common stock, par value, in dollars per share | $ 0.125 | $ 0.125 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 115,858,190 | 115,858,190 |
Common stock, shares outstanding | 79,640,930 | 80,022,291 |
Treasury stock, shares at cost | 36,217,260 | 35,835,899 |
Consolidated Statement Of Compr
Consolidated Statement Of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 793,478 | $ 767,541 | $ 1,576,789 | $ 1,542,448 |
Cost of goods sold | 427,837 | 422,501 | 850,940 | 851,131 |
Gross profit | 365,641 | 345,040 | 725,849 | 691,317 |
Research and development expenses | 63,252 | 62,514 | 126,637 | 125,976 |
Selling and administrative expenses | 132,784 | 131,023 | 256,327 | 250,018 |
Amortization of acquisition-related intangibles | 5,130 | 3,040 | 11,191 | 4,880 |
Restructuring and other charges, net | 0 | (358) | 0 | (170) |
Operating profit | 164,475 | 148,821 | 331,694 | 310,613 |
Interest expense | 15,060 | 11,407 | 27,539 | 22,502 |
Other (income) expense, net | (2,635) | 436 | (2,792) | (5,275) |
Income before taxes | 152,050 | 136,978 | 306,947 | 293,386 |
Taxes on income | 35,317 | 31,604 | 71,610 | 59,754 |
Net income | 116,733 | 105,374 | 235,337 | 233,632 |
Other comprehensive income, after tax: | ||||
Foreign currency translation adjustments | (4,689) | 17,557 | 9,389 | (32,958) |
(Losses) gains on derivatives qualifying as hedges | 800 | (5,966) | (9,392) | 6,117 |
Pension and postretirement net liability | 2,578 | 5,476 | 5,133 | 11,023 |
Net current period other comprehensive income (loss) | (1,311) | 17,067 | 5,130 | (15,818) |
Total comprehensive income | $ 115,422 | $ 122,441 | $ 240,467 | $ 217,814 |
Net income per share - basic, in dollars per share | $ 1.46 | $ 1.30 | $ 2.94 | $ 2.88 |
Net income per share - diluted, in dollars per share | $ 1.46 | $ 1.29 | $ 2.93 | $ 2.86 |
Average number of shares outstanding - basic | 79,764 | 80,790 | 79,809 | 80,729 |
Average number of shares outstanding - diluted | 80,040 | 81,192 | 80,141 | 81,201 |
Dividends declared per share, in dollars per share | $ 0.56 | $ 0.47 | $ 1.12 | $ 0.94 |
Consolidated Statement Of Cash
Consolidated Statement Of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 235,337 | $ 233,632 |
Adjustments to reconcile to net cash provided by operating activities: | ||
Depreciation and amortization | 49,743 | 41,041 |
Deferred income taxes | 16,543 | 17,891 |
(Gain) loss on disposal of assets | (2,910) | 14 |
Stock-based compensation | 13,774 | 12,860 |
Pension contributions | (39,510) | (57,493) |
Changes in assets and liabilities, net of acquisitions: | ||
Trade receivables | (70,361) | (92,329) |
Inventories | (7,271) | (9,834) |
Accounts payable | (29,167) | 27,334 |
Accruals for incentive compensation | (2,001) | (21,191) |
Other current payables and accrued expenses | 18,800 | 21,305 |
Other assets | (1,346) | (12,417) |
Other liabilities | (27,081) | 5,505 |
Net cash provided by operating activities | 154,550 | 166,318 |
Cash flows from investing activities: | ||
Payments to Acquire Businesses, Net of Cash Acquired | 0 | 188,835 |
Additions to property, plant and equipment | (43,236) | (37,937) |
Proceeds From Termination Of Life Insurance Contracts | 0 | 548 |
Payments for (Proceeds from) Hedge, Investing Activities | 641 | (9,735) |
Proceeds from disposal of assets | 3,630 | 1,515 |
Net cash used in investing activities | (40,247) | (214,974) |
Cash flows from financing activities: | ||
Cash dividends paid to shareholders | (89,463) | (75,927) |
Net change in revolving credit facility borrowings and overdrafts | (138,142) | (30,283) |
Deferred financing costs | (4,796) | 0 |
Proceeds from issuance of long-term debt | 555,559 | 86,162 |
Loss on pre-issuance hedges | (3,244) | 0 |
Proceeds from issuance of stock under stock plans | 494 | 286 |
Excess tax benefits on stock-based payments | 4,431 | 11,608 |
Purchase of treasury stock | (71,714) | (38,813) |
Net cash provided by (used in) financing activities | 253,125 | (46,967) |
Effect of exchange rate changes on cash and cash equivalents | (9,424) | (5,696) |
Net change in cash and cash equivalents | 358,004 | (101,319) |
Cash and cash equivalents at beginning of year | 181,988 | 478,573 |
Cash and cash equivalents at end of period | 539,992 | 377,254 |
Interest paid, net of amounts capitalized | 24,971 | 23,827 |
Income taxes paid | $ 52,719 | $ 46,071 |
Consolidated Financial Statemen
Consolidated Financial Statements | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Consolidated Financial Statements | Consolidated Financial Statements: Basis of Presentation These interim statements and related management’s discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the related notes and management’s discussion and analysis of results of operations, liquidity and capital resources included in our 2015 Annual Report on Form 10-K (“ 2015 Form 10-K”). These interim statements are unaudited. The year-end balance sheet data included in this Form 10-Q filing was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America. We have historically operated and continue to operate on a 52/53 week fiscal year ending on the Friday closest to the last day of the quarter. For ease of presentation, June 30 and December 31 are used consistently throughout this Form 10-Q and these interim financial statements and related notes to represent the period-end dates. For the 2016 and 2015 quarters, the actual closing dates were July 1, and July 3, respectively. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. When used herein, the terms “IFF,” the “Company,” “we,” “us” and “our” mean International Flavors & Fragrances Inc. and its consolidated subsidiaries. Reclassifications and Revisions Certain prior year amounts have been reclassified and revised to conform with current year presentation. The Consolidated Balance Sheet as of December 31, 2015, has been revised to properly reflect in-bound goods in transit. Accordingly, Inventory and Accounts payable decreased by $17.0 million . In addition, an adjustment has been made to two line items within net cash provided by operating activities for the 2015 Consolidated Statement of Cash Flows to reflect the previously recorded correction of a balance sheet classification associated with accounts payable and accruals. These adjustments were not material to the Consolidated Statement of Cash Flows. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which requires changes to several aspects of the accounting for share-based payment transactions, including the treatment of income tax consequences, classification of awards as either equity or liabilities, and classification of certain items on the statement of cash flows. This guidance will be effective for annual and interim periods beginning after December 15, 2016. Early adoption will be permitted for all entities. Among other changes, the standard requires that employee taxes paid when an employer withholds shares be presented in the Consolidated Statement of Cash Flows as a financing activity instead of an operating activity. The Company expects to adopt this change retroactively and that the impact on the Consolidated Statement of Cash Flows will be approximately $20 - $25 million on an annual basis. The Company is currently evaluating the other changes required by the standard. In February 2016, the FASB issued authoritative guidance which requires changes to the accounting for leases. The new guidance establishes a new lease accounting model, that, for all companies, requires entities to record assets and liabilities related to leases on the balance sheet for certain types of leases. The guidance will be effective for annual and interim periods beginning after December 31, 2018. Early adoption will be permitted for all entities. The Company expects the adoption of this guidance will result in significant increases to assets and liabilities on its Consolidated Balance Sheet and is still evaluating the impact on its Consolidated Statement of Comprehensive Income. In September 2015, the FASB issued authoritative guidance relating to the adjustments made during the measurement period for items in a business combination. Specifically, the new guidance requires adjustments related to the finalization of estimates to be recorded in the period when they are determined and to provide certain additional disclosures. This guidance is effective for fiscal years beginning after December 15, 2015. The Company adopted this guidance during 2016 and the adoption did not have a significant impact on its consolidated financial statements. In April 2015, the FASB issued authoritative guidance which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This guidance is effective for annual and interim periods beginning after December 15, 2015. The Company adopted this guidance retroactively in 2016 and accordingly has reclassified all debt issuance costs on long-term debt as a direct deduction from the carrying amount of the debt liability in the Consolidated Balance Sheet as of December 31, 2015. The adoption of this guidance did not have a significant impact on its consolidated financial statements. In May 2014, the FASB issued authoritative guidance to clarify the principles to be used to recognize revenue and made subsequent clarifications under the new requirements during May 2016. The guidance is applicable to all entities and is effective for annual and interim periods beginning after December 15, 2017. Adoption as of the original effective date is permitted. The Company is currently evaluating the impact that this new standard will have on its consolidated financial statements. Accounts Receivable The Company sells certain accounts receivable on a non-recourse basis to unrelated financial institutions under “factoring” agreements that are sponsored, solely and individually, by certain customers. The Company accounts for these transactions as sales of receivables, removes the receivables sold from its financial statements, and records cash proceeds when received by the Company. The beneficial impact on cash from operations from participating in these programs increased approximately $17.7 million for the six months ended June 30, 2016 compared to an increase of approximately $1.3 million for the six months ended June 30, 2015 . The cost of participating in these programs was immaterial to our results in all periods. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share: Net income per share is based on the weighted average number of shares outstanding. A reconciliation of the shares used in the computation of basic and diluted net income per share is as follows: Three Months Ended June 30, Six Months Ended June 30, (SHARES IN THOUSANDS) 2016 2015 2016 2015 Basic 79,764 80,790 79,809 80,729 Assumed dilution under stock plans 276 402 332 472 Diluted 80,040 81,192 80,141 81,201 An immaterial amount of stock-settled appreciation rights (“SSARs”) were excluded from the computation of diluted net income per share for the three and six months ended June 30, 2016 . There were no stock options or SSARs excluded from the 2015 periods. The Company has issued shares of purchased restricted common stock (“PRS”) which contain rights to nonforfeitable dividends while these shares are outstanding and thus are considered participating securities. Such securities are required to be included in the computation of basic and diluted earnings per share pursuant to the two-class method. The Company did not present the two-class method since the difference between basic and diluted net income per share for both unrestricted common shareholders and PRS shareholders was less than $0.01 per share for each period presented, and the number of PRS outstanding as of June 30, 2016 and 2015 was immaterial. Net income allocated to such PRS was $0.3 million and $0.5 million for the three months ended June 30, 2016 and 2015 , respectively and $0.5 million and $1.1 million during the six months ended June 30, 2016 and 2015 , respectively. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions: 2015 Activity Lucas Meyer During the third quarter of 2015, the Company completed the acquisition of 100% of the outstanding shares of Lucas Meyer Cosmetics, a business of Unipex Group ("Lucas Meyer"). The total shares acquired include shares effectively acquired pursuant to put and call option agreements. The acquisition was accounted for under the purchase method. Total consideration was approximately Euro 284.0 million ( $312.1 million ), including approximately $4.8 million of cash acquired. The Company paid Euro 282.1 million (approximately $309.9 million ) for the acquisition, which was funded from existing resources, and recorded a liability of approximately Euro 2.0 million (approximately $2.2 million ) for shares to be purchased under the put and call option agreements. The purchase price exceeded the fair value of existing net assets by approximately $290.1 million . The excess was allocated principally to identifiable intangible assets (approximately $156.4 million ), goodwill (approximately $179.5 million ) and approximately $38.1 million to deferred taxes. Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Separately identifiable intangible assets are principally related to customer relationships, proprietary technology and patents. The intangible assets are being amortized over the following estimated useful lives: trade names and proprietary technology, 28 years ; customer relationships, 23 years ; patents, 11 years ; and non-solicitation agreements, 3 years . No pro forma financial information for 2016 is presented as the impact of the acquisition was immaterial to the Consolidated Statement of Comprehensive Income. During the second quarter of 2016, the purchase price allocation was updated, however, none of the changes were material to the consolidated financial statements. The purchase price allocation was completed during the second quarter of 2016. Ottens Flavors During the second quarter of 2015, the Company completed the acquisition of 100% of the outstanding shares of Henry H. Ottens Manufacturing Co., Inc. ("Ottens Flavors"). The acquisition was accounted for under the purchase method. The Company paid $198.9 million (including $10.4 million of cash acquired) for this acquisition, which was funded from existing resources. The purchase price allocation was completed during the fourth quarter of 2015. No pro forma financial information for 2016 is presented as the impact of the acquisition was not material to the consolidated financial statements. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net Goodwill and Other Intangible Assets, Net (Notes) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Other Intangible Assets, Net: Goodwill Movements in goodwill during 2016 were as follows: (DOLLARS IN THOUSANDS) Goodwill Balance at December 31, 2015 $ 941,389 Foreign exchange 3,229 Other (4,074 ) Balance at June 30, 2016 $ 940,544 The decrease reflected in Other above is the impact of finalizing the purchase price allocation of Lucas Meyer as disclosed in Note 3. Other Intangible Assets Other intangible assets, net consist of the following amounts: June 30, December 31, (DOLLARS IN THOUSANDS) 2016 2015 Cost Customer relationships $ 289,743 $ 293,799 Trade names & patents 31,554 34,182 Technological know-how 111,808 112,393 Other 24,072 22,711 Total carrying value 457,177 463,085 Accumulated Amortization Customer relationships (74,061 ) (66,324 ) Trade names & patents (11,272 ) (10,282 ) Technological know-how (66,618 ) (65,258 ) Other (16,389 ) (15,217 ) Total accumulated amortization (168,340 ) (157,081 ) Other intangible assets, net $ 288,837 $ 306,004 Amortization Amortization expense was $5.1 million and $3.0 million for the three months ended June 30, 2016 and 2015 , respectively and $11.2 million and $4.9 million for the six months ended June 30, 2016 and 2015 , respectively. Annual amortization is expected to be $21.8 million for the full year 2016 , $21.4 million for the year 2017 , $21.2 million for the year 2018 , $20.0 million for the year 2019 , $19.3 million for the year 2020 and $15.1 million for the year 2021 . |
Restructuring and Other Charges
Restructuring and Other Charges, Net | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges, Net | Restructuring and Other Charges, Net: During the fourth quarter of 2015, the Company established a series of initiatives intended to streamline its management structure, simplify decision-making and accountability, better leverage and align its capabilities across the organization and improve efficiency of its global manufacturing and operations network. As a result, in the fourth quarter of 2015, the Company recorded a pre-tax charge of $7.6 million , included in restructuring and other charges, net, related to severance and related costs pertaining to approximately 150 positions that will be affected. During the second quarter of 2016 , the Company made payments of $1.4 million and recorded accelerated depreciation expense of $0.3 million . The total cost of the plan is expected to be approximately $10.5 million with the remaining charges relating principally to accelerated depreciation. The Company expects the plan to be fully implemented in the second half of 2017. Changes in employee-related restructuring liabilities during the six months ended June 30, 2016 , were as follows: (DOLLARS IN THOUSANDS) Employee-Related Costs Accelerated Depreciation Total Balance at December 31, 2015 $ 7,882 $ — $ 7,882 Additional charges (reversals), net — 283 283 Non-cash charges — (283 ) (283 ) Payments and other costs (1,446 ) — (1,446 ) Balance at June 30, 2016 $ 6,436 $ — $ 6,436 |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings: Debt consists of the following: (DOLLARS IN THOUSANDS) Rate Maturities June 30, 2016 December 31, 2015 Senior notes - 2006 (1) 6.14 % 2016 $ 124,991 $ 124,964 Senior notes - 2007 (1) 6.40 % 2017-27 499,618 499,618 Senior notes - 2013 (1) 3.20 % 2023 297,846 297,683 Euro Senior notes - 2016 (1) 1.75 % 2024 550,598 — Credit facility 2.67 % 2019 — 131,196 Bank overdrafts and other 15,791 10,982 Deferred realized gains on interest rate swaps 2,313 3,279 1,491,157 1,067,722 Less: Current portion of long-term debt (133,473 ) (132,349 ) $ 1,357,684 $ 935,373 (1) Amount is net of unamortized discount and debt issuance costs. On March 14, 2016, the Company issued Euro 500.0 million face amount of 1.75% Senior Notes ("Euro Senior Notes - 2016") due 2024 at a discount of Euro 0.9 million . The Company received proceeds related to the issuance of these Euro Senior Notes - 2016 of Euro 496.0 million which was net of the Euro 0.9 million discount and Euro 3.1 million underwriting discount (recorded as deferred financing costs). In addition, the Company incurred $1.3 million of other deferred financing costs in connection with the debt issuance. In connection with the debt issuance, the Company entered into pre-issuance hedging transactions that were settled upon issuance of the debt and resulted in a loss of approximately $3.2 million as of June 30, 2016 . The discount, deferred financing costs and pre-issuance hedge loss are being amortized as interest expense over the 8 year term of the debt. The Euro Senior Notes - 2016 bear interest at a rate of 1.75% per annum, with interest payable on March 14 of each year, commencing on March 14, 2017. The Euro Senior Notes - 2016 will mature on March 14, 2024. Upon 30 days’ notice to holders of the Euro Senior Notes - 2016 , the Company may redeem the Euro Senior Notes - 2016 for cash in whole, at any time, or in part, from time to time, prior to maturity, at redemption prices that include accrued and unpaid interest and a make-whole premium, as specified in the indenture governing the Euro Senior Notes - 2016. However, no make-whole premium will be paid for redemptions of the Euro Senior Notes - 2016 on or after December 14, 2023. The indenture provides for customary events of default and contains certain negative covenants that limit the ability of the Company and its subsidiaries to grant liens on assets, or to enter into sale-leaseback transactions. In addition, subject to certain limitations, in the event of the occurrence of both (1) a change of control of the Company and (2) a downgrade of the Euro Senior Notes - 2016 below investment grade rating by both Moody’s Investors Services, Inc. and Standard & Poor’s Ratings Services within a specified time period, the Company will be required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount of the Euro Senior Notes - 2016, plus accrued and unpaid interest to the date of repurchase. As discussed in Note 11, the Euro Senior Notes - 2016 have been designated as a hedge of the Company's net investment in certain subsidiaries. On July 12, 2016, the Company made a payment of $125.0 million related to our Senior Notes - 2006. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: Uncertain Tax Positions At June 30, 2016 , the Company had $25.1 million of unrecognized tax benefits recorded in Other liabilities. If these unrecognized tax benefits were recognized, the effective tax rate would be affected. At June 30, 2016 , the Company had accrued interest and penalties of $0.9 million classified in Other liabilities. As of June 30, 2016 , the Company’s aggregate provisions for uncertain tax positions, including interest and penalties, was $26.0 million associated with various tax positions asserted in foreign jurisdictions, none of which is individually material. The Company regularly repatriates a portion of current year earnings from select non–U.S. subsidiaries. No provision is made for additional taxes on undistributed earnings of subsidiary companies that are intended and planned to be indefinitely invested in such subsidiaries. We intend to, and have plans to, reinvest these earnings indefinitely in our foreign subsidiaries to fund local operations and/or capital projects. The Company has ongoing income tax audits and legal proceedings which are at various stages of administrative or judicial review. In addition, the Company has open tax years with various taxing jurisdictions that range primarily from 2006 to 2015 . Based on currently available information, we do not believe the ultimate outcome of any of these tax audits and other tax positions related to open tax years, when finalized, will have a material impact on our financial position. The Company also has other ongoing tax audits and legal proceedings that relate to indirect taxes, such as value-added taxes, sales and use taxes and property taxes, which are discussed in Note 13. Effective Tax Rate The effective tax rate for the three months ended June 30, 2016 was 23.2% compared with 23.1% for the three months ended June 30, 2015 . The quarter-over-quarter increase was largely due to higher loss provisions partially offset by lower cost of repatriation. The effective tax rate for the six months ended June 30, 2016 was 23.3% compared with 20.4% for the six months ended June 30, 2015 . The year-over-year increase was primarily due to a benefit of $10.5 million recorded in the first quarter of 2015, as a result of favorable tax rulings in Spain and another jurisdiction for which reserves were previously recorded and higher loss provisions in 2016, partially offset by lower cost of repatriation in the 2016 period. |
Stock Compensation Plans
Stock Compensation Plans | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation Plans | Stock Compensation Plans: The Company has various plans under which its officers, senior management, other key employees and directors may be granted equity-based awards. Equity awards outstanding under the plans include PRS, purchased restricted stock units, restricted stock units ("RSUs"), stock options, SSARs and Long-Term Incentive Plan awards; liability-based awards outstanding under the plans are cash-settled RSUs. Stock-based compensation expense and related tax benefits were as follows: Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Equity-based awards $ 7,844 $ 7,473 $ 13,774 $ 12,860 Liability-based awards 1,739 666 2,332 2,573 Total stock-based compensation expense 9,583 8,139 16,106 15,433 Less: tax benefit (2,816 ) (2,225 ) (4,789 ) (4,412 ) Total stock-based compensation expense, after tax $ 6,767 $ 5,914 $ 11,317 $ 11,021 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information: The Company is organized into two operating segments: Flavors and Fragrances. These segments align with the internal structure of the Company used to manage these businesses. Performance of these operating segments is evaluated based on segment profit which is defined as operating profit before Restructuring and other charges, net, Global expenses (as discussed below) and certain non-recurring items, Interest expense, Other income (expense), net and Taxes on income. The Global expenses caption below represents corporate and headquarters-related expenses which include legal, finance, human resources, certain incentive compensation expenses and other R&D and administrative expenses that are not allocated to individual operating segments. Reportable segment information is as follows: Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Net sales: Flavors $ 379,504 $ 372,478 $ 752,012 $ 749,586 Fragrances 413,974 395,063 824,777 792,862 Consolidated $ 793,478 $ 767,541 $ 1,576,789 $ 1,542,448 Segment profit: Flavors $ 90,337 $ 84,015 $ 182,151 $ 176,743 Fragrances 87,596 79,924 176,833 161,522 Global expenses (12,232 ) (8,629 ) (26,141 ) (20,194 ) Restructuring and other charges, net (1) (182 ) 358 (283 ) 170 Acquisition and related costs (2) (213 ) (6,566 ) (1,249 ) (7,066 ) Operational improvement initiative costs (3) (831 ) (281 ) (1,099 ) (562 ) Spanish capital tax settlement (4) — — 1,482 — Operating profit 164,475 148,821 331,694 310,613 Interest expense (15,060 ) (11,407 ) (27,539 ) (22,502 ) Other income (expense) 2,635 (436 ) 2,792 5,275 Income before taxes $ 152,050 $ 136,978 $ 306,947 $ 293,386 (1) Restructuring and other charges, net relate to accelerated depreciation costs in Europe recorded in Cost of goods sold. (2) Acquisition and related costs are associated with the 2015 acquisition of Lucas Meyer as discussed in Note 3, including inventory step-up charges related to the inventory acquired. (3) Operational improvement initiative costs relate to accelerated depreciation and severance costs in Asia in the 2016 period and accelerated depreciation in the 2015 period. (4) The Spanish capital tax settlement represents interest received from the Spanish government related to the reversal of the unfavorable ruling the Spanish capital tax case from 2002, which was reversed during the year ended December 31, 2015. Net sales are attributed to individual regions based upon the destination of product delivery. Net sales related to the U.S. for the three months ended June 30, 2016 and 2015 were $185 million and $174 million , respectively and for the six months ended June 30, 2016 and 2015 were $365 million and $338 million , respectively. Net sales attributed to all foreign countries in total for the three months ended June 30, 2016 and 2015 were $608 million and $594 million , respectively and for the six months ended June 30, 2016 and 2015 were $1,212 million and $1,204 million , respectively. No country other than the U.S. had net sales in any period presented greater than 10% of total consolidated net sales. |
Employee Benefits
Employee Benefits | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefits | Employee Benefits: Pension and other defined contribution retirement plan expenses included the following components: U.S. Plans Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Service cost for benefits earned $ 772 $ 984 $ 1,543 $ 1,968 Interest cost on projected benefit obligation 6,006 5,954 12,013 11,907 Expected return on plan assets (8,070 ) (8,083 ) (16,139 ) (16,165 ) Net amortization and deferrals 1,385 5,203 2,772 10,406 Net periodic benefit cost 93 4,058 189 8,116 Defined contribution and other retirement plans 2,211 2,093 4,612 4,228 Total expense $ 2,304 $ 6,151 $ 4,801 $ 12,344 Non-U.S. Plans Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Service cost for benefits earned $ 3,863 $ 4,102 $ 7,638 $ 8,485 Interest cost on projected benefit obligation 6,372 6,151 12,737 12,543 Expected return on plan assets (11,985 ) (12,440 ) (23,934 ) (25,390 ) Net amortization and deferrals 3,286 3,314 6,550 6,801 Net periodic benefit cost 1,536 1,127 2,991 2,439 Defined contribution and other retirement plans 1,763 1,693 3,470 3,288 Total expense $ 3,299 $ 2,820 $ 6,461 $ 5,727 The Company expects to contribute a total of approximately $30 million to its non-U.S. pension plans during 2016 . During the six months ended June 30, 2016 , $20.0 million of contributions were made to the qualified U.S. pension plans, $17.3 million of contributions were made to the non U.S. plans and $2.2 million of benefit payments were made with respect to the Company's non-qualified U.S. pension plan. Expense recognized for postretirement benefits other than pensions included the following components: Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Service cost for benefits earned $ 214 $ 301 $ 429 $ 601 Interest cost on projected benefit obligation 787 1,082 1,574 2,164 Net amortization and deferrals (1,355 ) (712 ) (2,710 ) (1,423 ) Total postretirement benefit (income) expense $ (354 ) $ 671 $ (707 ) $ 1,342 The Company expects to contribute approximately $5 million to its postretirement benefits other than pension plans during 2016 . In the six months ended June 30, 2016 , $2.6 million of contributions were made. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Financial Instruments: Fair Value Accounting guidance on fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. These two types of inputs create the following fair value hierarchy: • Level 1–Quoted prices for identical instruments in active markets. • Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3–Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable . This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. We determine the fair value of structured liabilities (where performance is linked to structured interest rates, inflation or currency risks) using the LIBOR swap curve and forward interest and exchange rates at period end. Such instruments are classified as Level 2 based on the observability of significant inputs to the model. We do not have any instruments classified as Level 1 or Level 3, other than those included in pension asset trusts as discussed in Note 13 of our 2015 Form 10-K. These valuations take into consideration our credit risk and our counterparties’ credit risk. The estimated change in the fair value of these instruments due to such changes in our own credit risk (or instrument-specific credit risk) was immaterial as of June 30, 2016 . The amounts recorded in the balance sheet (carrying amount) and the estimated fair values of financial instruments at June 30, 2016 and December 31, 2015 consisted of the following: June 30, 2016 December 31, 2015 (DOLLARS IN THOUSANDS) Carrying Fair Carrying Fair Cash and cash equivalents (1) $ 539,992 $ 539,992 $ 181,988 $ 181,988 Credit facilities and bank overdrafts (2) 15,791 15,791 142,178 142,178 Long-term debt: (3) Senior notes - 2006 124,991 125,225 124,964 127,717 Senior notes - 2007 499,618 578,590 499,618 563,855 Senior notes - 2013 297,846 312,847 297,683 290,830 Euro Senior notes - 2016 550,598 584,953 — — (1) The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those instruments. (2) The carrying amount of our credit facilities and bank overdrafts approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments. (3) The fair value of our long-term debt was calculated using discounted cash flows applying current interest rates and current credit spreads based on our own credit risk. Derivatives The Company periodically enters into foreign currency forward contracts with the objective of reducing exposure to cash flow volatility associated with our intercompany loans, foreign currency receivables and payables, and anticipated purchases of certain raw materials used in operations. These contracts generally involve the exchange of one currency for a second currency at a future date, have maturities not exceeding twelve months and are with counterparties which are major international financial institutions. During the six months ended June 30, 2016 and the year ended December 31, 2015 , the Company entered into several forward currency contracts which qualified as net investment hedges, in order to mitigate a portion of our net European investments from foreign currency risk. The effective portions of net investment hedges are recorded in Other comprehensive income (“OCI”) as a component of Foreign currency translation adjustments in the accompanying Consolidated Statement of Comprehensive Income. Realized gains (losses) are deferred in accumulated other comprehensive income ("AOCI") where they will remain until the net investments in our European subsidiaries are divested. The outstanding forward currency contracts have remaining maturities of approximately one year . Eight of these forward currency contracts matured during the six months ended June 30, 2016 . Subsequent to the issuance of the Euro Senior Notes - 2016 during the first quarter of 2016, the Company designated the debt as a hedge of a portion of its net European investments. Accordingly, the change in the value of the debt that is attributable to foreign exchange movements is recorded in OCI as a component of Foreign currency translation adjustments in the accompanying Consolidated Statement of Comprehensive Income. During the six months ended June 30, 2016 and the year ended December 31, 2015 , the Company entered into several forward currency contracts which qualified as cash flow hedges. The objective of these hedges is to protect against the currency risk associated with forecasted U.S. dollar (USD) denominated raw material purchases made by Euro (EUR) functional currency entities which result from changes in the EUR/USD exchange rate. The effective portions of cash flow hedges are recorded in OCI as a component of Gains/(losses) on derivatives qualifying as hedges in the accompanying Consolidated Statement of Comprehensive Income. Realized gains/(losses) in AOCI related to cash flow hedges of raw material purchases are recognized as a component of Cost of goods sold in the accompanying Consolidated Statement of Comprehensive Income in the same period as the related costs are recognized. During 2015 and 2014, the Company entered into interest rate swap agreements that effectively converted the fixed rate on a portion of our long-term borrowings to a variable short-term rate based on the LIBOR plus an interest markup. These swaps are designated as fair value hedges. Amounts recognized in Interest expense were immaterial for the three and six months ended June 30, 2016 . During the first quarter of 2016, the Company entered into and terminated two Euro interest rate swap agreements to hedge the anticipated issuance of fixed-rate debt. These swaps were designated as cash flow hedges. The effective portions of cash flow hedges are recorded in OCI as a component of Losses on derivatives qualifying as hedges in the accompanying Consolidated Statement of Comprehensive Income. The Company incurred a loss of Euro 2.9 million ( $3.2 million ) due to the termination of these swaps. The loss will be amortized as interest expense over the life of the Euro Senior Notes - 2016 as discussed in Note 6. The following table shows the notional amount of the Company’s derivative instruments outstanding as of June 30, 2016 and December 31, 2015 : (DOLLARS IN THOUSANDS) June 30, 2016 December 31, 2015 Foreign currency contracts $ 805,900 $ 573,200 Interest rate swaps $ 475,000 $ 475,000 The following tables show the Company’s derivative instruments measured at fair value (Level 2 of the fair value hierarchy), as reflected in the Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 : June 30, 2016 (DOLLARS IN THOUSANDS) Fair Value of Fair Value of Total Fair Derivative assets (a) Foreign currency contracts $ 4,038 $ 12,159 $ 16,197 Interest rate swaps 4,341 — 4,341 $ 8,379 $ 12,159 $ 20,538 Derivative liabilities (b) Foreign currency contracts $ 1,353 $ 9,274 $ 10,627 $ 1,353 $ 9,274 $ 10,627 December 31, 2015 (DOLLARS IN THOUSANDS) Fair Value of Fair Value of Total Fair Derivative assets (a) Foreign currency contracts $ 6,560 $ 3,700 $ 10,260 Interest rate swaps 1,210 — 1,210 $ 7,770 $ 3,700 $ 11,470 Derivative liabilities (b) Foreign currency contracts $ 2,106 $ 3,022 $ 5,128 (a) Derivative assets are recorded to Prepaid expenses and other current assets in the Consolidated Balance Sheet. (b) Derivative liabilities are recorded as Other current liabilities in the Consolidated Balance Sheet. The following table shows the effect of the Company’s derivative instruments which were not designated as hedging instruments in the Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2016 and 2015 (in thousands): Derivatives Not Designated as Hedging Instruments Amount of Gain (Loss) Location of Gain (Loss) Recognized in Income on Derivative Three Months Ended June 30, 2016 2015 Foreign currency contracts $ 1,395 $ 371 Other (income) expense, net Derivatives Not Designated as Hedging Instruments Amount of Gain (Loss) Location of Gain (Loss) Recognized in Income on Derivative Six Months Ended June 30, 2016 2015 Foreign currency contracts $ (3,548 ) $ 10,075 Other (income) expense, net Most of these net gains (losses) offset any recognized gains (losses) arising from the revaluation of the related intercompany loans during the same respective periods. The following table shows the effect of the Company’s derivative instruments designated as cash flow and net investment hedging instruments in the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2016 and 2015 (in thousands): Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) Location of (Loss) Gain Reclassified from AOCI into Income (Effective Portion) Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) Three Months Ended June 30, Three Months Ended June 30, 2016 2015 2016 2015 Derivatives in Cash Flow Hedging Relationships: Foreign currency contracts $ 612 $ (6,035 ) Cost of goods sold $ 2,736 $ 3,561 Interest rate swaps (1) 171 69 Interest expense (171 ) (69 ) Derivatives in Net Investment Hedging Relationships: Foreign currency contracts 1,934 (1,030 ) N/A — — Euro Senior notes - 2016 9,649 — N/A — — Total $ 12,366 $ (6,996 ) $ 2,565 $ 3,492 Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) Location of (Loss) Gain Reclassified from AOCI into Income (Effective Portion) Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) Six Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Derivatives in Cash Flow Hedging Relationships: Foreign currency contracts $ (6,391 ) $ 5,979 Cost of goods sold $ 5,352 $ 4,584 Interest rate swaps (1) (3,001 ) 138 Interest expense (257 ) (138 ) Derivatives in Net Investment Hedging Relationships: Foreign currency contracts (470 ) 3,531 N/A — — Euro Senior notes - 2016 9,649 — N/A — — Total $ (213 ) $ 9,648 $ 5,095 $ 4,446 (1) Interest rate swaps were entered into as pre-issuance hedges. No ineffectiveness was experienced in the above noted cash flow or net investment hedges during the three and six months ended June 30, 2016 and 2015 . The Company expects that approximately $1.7 million (net of tax) of derivative losses included in AOCI at June 30, 2016 , based on current market rates, will be reclassified into earnings within the next 12 months. The majority of this amount will vary due to fluctuations in foreign currency exchange rates. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss): The following tables present changes in the accumulated balances for each component of other comprehensive income, including current period other comprehensive income and reclassifications out of accumulated other comprehensive income: Foreign Currency Translation Adjustments (Losses) Gains on Derivatives Qualifying as Hedges Pension and Postretirement Liability Adjustment Total (DOLLARS IN THOUSANDS) Accumulated other comprehensive (loss) income, net of tax, as of December 31, 2015 $ (297,499 ) $ 9,401 $ (325,342 ) $ (613,440 ) OCI before reclassifications 9,389 (4,297 ) — 5,092 Amounts reclassified from AOCI — (5,095 ) 5,133 38 Net current period other comprehensive income (loss) 9,389 (9,392 ) 5,133 5,130 Accumulated other comprehensive (loss) income, net of tax, as of June 30, 2016 $ (288,110 ) $ 9 $ (320,209 ) $ (608,310 ) Foreign Currency Translation Adjustments (Losses) Gains on Derivatives Qualifying as Hedges Pension and Postretirement Liability Adjustment Total (DOLLARS IN THOUSANDS) Accumulated other comprehensive (loss) income, net of tax, as of December 31, 2014 $ (173,342 ) $ 12,371 $ (379,459 ) $ (540,430 ) OCI before reclassifications (32,958 ) 10,563 — (22,395 ) Amounts reclassified from AOCI — (4,446 ) 11,023 6,577 Net current period other comprehensive income (loss) (32,958 ) 6,117 11,023 (15,818 ) Accumulated other comprehensive (loss) income, net of tax, as of June 30, 2015 $ (206,300 ) $ 18,488 $ (368,436 ) $ (556,248 ) The following table provides details about reclassifications out of accumulated other comprehensive income to the Consolidated Statement of Comprehensive Income: Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 Affected Line Item in the (DOLLARS IN THOUSANDS) (Losses) gains on derivatives qualifying as hedges Foreign currency contracts $ 6,117 $ 5,239 Cost of goods sold Interest rate swaps (257 ) (138 ) Interest expense (765 ) (655 ) Provision for income taxes $ 5,095 $ 4,446 Total, net of income taxes (Losses) gains on pension and postretirement liability adjustments Prior service cost $ 3,735 $ 2,318 (a) Actuarial losses (10,347 ) (18,102 ) (a) 1,479 4,761 Provision for income taxes $ (5,133 ) $ (11,023 ) Total, net of income taxes (a) The amortization of prior service cost and actuarial loss is included in the computation of net periodic benefit cost. Refer to Note 14 of our 2015 Form 10-K for additional information regarding net periodic benefit cost. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies: Guarantees and Letters of Credit The Company has various bank guarantees and letters of credit which are available for use to support its ongoing business operations and to satisfy governmental requirements associated with pending litigation in various jurisdictions. At June 30, 2016 , we had total bank guarantees and standby letters of credit of approximately $38.4 million with various financial institutions. Included in the above aggregate amount is a total of $16.2 million in bank guarantees which the Company has posted for certain assessments in Brazil for other diverse income tax and indirect tax disputes related to fiscal years 1998-2011. There were no material amounts utilized under the standby letters of credit as of June 30, 2016 . In order to challenge the assessments in these cases in Brazil, the Company has been required to, and has separately pledged assets, principally property, plant and equipment, to cover assessments in the amount of approximately $13.4 million as of June 30, 2016 . Lines of Credit The Company has various lines of credit which are available to support its ongoing business operations. At June 30, 2016 , we had available lines of credit (in addition to the $950 million of capacity under the Credit Facility discussed in Note 8 of our 2015 Form 10-K) of approximately $76.6 million with various financial institutions. There were no significant amounts drawn down pursuant to these lines of credit as of June 30, 2016 . Litigation The Company assesses contingencies related to litigation and/or other matters to determine the degree of probability and range of possible loss. A loss contingency is accrued in the Company’s consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly sensitive and requires judgments about future events. On at least a quarterly basis, the Company reviews contingencies related to litigation to determine the adequacy of accruals. The amount of ultimate loss may differ from these estimates and further events may require the Company to increase or decrease the amounts it has accrued on any matter. Periodically, we assess our insurance coverage for all known claims, where applicable, taking into account aggregate coverage by occurrence, limits of coverage, self-insured retentions and deductibles, historical claims experience and claims experience with our insurance carriers. The liabilities are recorded at management’s best estimate of the probable outcome of the lawsuits and claims, taking into consideration the facts and circumstances of the individual matters as well as past experience on similar matters. At each balance sheet date, the key issues that management assesses are whether it is probable that a loss as to asserted or unasserted claims has been incurred and if so, whether the amount of loss can be reasonably estimated. We record the expected liability with respect to claims in Other liabilities and expected recoveries from our insurance carriers in Other assets. We recognize a receivable when we believe that realization of the insurance receivable is probable under the terms of the insurance policies and our payment experience to date. Environmental Over the past 20 years, various federal and state authorities and private parties have claimed that we are a Potentially Responsible Party (“PRP”) as a generator of waste materials for alleged pollution at a number of waste sites operated by third parties located principally in New Jersey and have sought to recover costs incurred and to be incurred to clean up the sites. We have been identified as a PRP at eight facilities operated by third parties at which investigation and/or remediation activities may be ongoing. We analyze our potential liability on at least a quarterly basis. We accrue for environmental liabilities when they are probable and estimable. We estimate our share of the total future cost for these sites to be less than $5 million . While joint and several liability is authorized under federal and state environmental laws, we believe the amounts we have paid and anticipate paying in the future for clean-up costs and damages at all sites are not material and will not have a material adverse effect on our financial condition, results of operations or liquidity. This assessment is based upon, among other things, the involvement of other PRPs at most of the sites, the status of the proceedings, including various settlement agreements and consent decrees, and the extended time period over which payments will likely be made. There can be no assurance, however, that future events will not require us to materially increase the amounts we anticipate paying for clean-up costs and damages at these sites, and that such increased amounts will not have a material adverse effect on our financial condition, results of operations or cash flows. China Facilities Guangzhou Flavors plant During 2015, the Company was notified by Chinese authorities of compliance issues pertaining to the emission of odors from several of its plants in China. As a result, the Company's Flavors facility in China was temporarily idled. Accordingly, the Company invested approximately $6.5 in odor-abatement equipment at these facilities to address these issues and is in the process of building a second Flavors site in China, which is expected to be completed during 2018. If the Company is required to close a plant, or operate one at significantly reduced production levels on a permanent basis, the Company may be required to record charges that could have a material impact on its consolidated financial results of operations, financial position and cash flows in future periods. Zhejiang Ingredients plant The Company has received a request from the Chinese government to relocate its Fragrance Ingredients plant in Zhejiang, China. The Company is in discussions with the government regarding the timing of the requested relocation and the amount and nature of government compensation to be provided to the Company. The net book value of the current site approximates $25 million . Depending upon the ultimate outcome of these discussions with the Chinese government, between $0 - 25 million of the remaining net book value may be subject to accelerated depreciation. Other Contingencies The Company has contingencies involving third parties (such as labor, contract, technology or product-related claims or litigation) as well as government-related items in various jurisdictions in which we operate pertaining to such items as value-added taxes, other indirect taxes, customs and duties and sales and use taxes. It is possible that cash flows or results of operations, in any period, could be materially affected by the unfavorable resolution of one or more of these contingencies. The most significant government-related contingencies exist in Brazil. With regard to the Brazilian matters, we believe we have valid defenses for the underlying positions under dispute; however, in order to pursue these defenses, we are required to, and have provided, bank guarantees and pledged assets in the aggregate amount of $29.6 million . The Brazilian matters take an extended period of time to proceed through the judicial process and there are a limited number of rulings to date. In March 2012, ZoomEssence, Inc. filed a complaint against the Company in the U.S. District Court of New Jersey alleging trade secret misappropriation, breach of contract and unjust enrichment in connection with certain spray dry technology disclosed to the Company. In connection with the claims, ZoomEssence is seeking an injunction and monetary damages. ZoomEssence initially sought a temporary restraining order and preliminary injunction, but the Court denied these applications in an order entered on September 27, 2013, finding that ZoomEssence had not demonstrated a likelihood of success on the merits of its claims. The Court subsequently referred the matter to mediation, however the private mediation session did not result in a resolution of the dispute. On November 3, 2014, ZoomEssence amended its complaint against the Company to include allegations of breach of the duty of good faith and fair dealing, fraud in the inducement, and misappropriation of confidential and proprietary information. On November 13, 2014, the Company filed a counterclaim against ZoomEssence alleging trade secret misappropriation, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, misappropriation of confidential and proprietary information, common law unfair competition, tortious interference with contractual relations, and conversion. The case is currently proceeding through discovery with a trial on the merits anticipated in late 2016/early 2017. The Company denies the allegations and will vigorously defend and pursue its position in Court. At this stage of the litigation, based on the information currently available to the Company, management does not believe that this matter represents a material loss contingency. Based on the information available as of June 30, 2016 , we estimate a range of reasonably possible loss related to the matters above, collectively, is $0 - $46 million . Separately, the Spanish tax authorities alleged claims for a capital tax, the Appellate Court rejected one of the two bases upon which we based our capital tax position. On January 22, 2014, we filed an appeal and in order to avoid future interest costs in the event our appeal was unsuccessful, we paid Euro 9.8 million ( $11.2 million , representing the principal amount) during the first quarter of 2014. On February 24, 2016, we received a favorable ruling on our appeal from the Spanish Supreme Court which overruled a lower court ruling. As a result of this decision, we have reversed the previously recorded provision of Euro 9.8 million ( $10.5 million ) for the year ended December 31, 2015. During the second quarter of 2016 , we recorded additional income of $1.4 million related to the finalization of amounts expected to be received from the authorities. This amount has been reflected as a reduction of administrative expense. |
Consolidated Financial Statem19
Consolidated Financial Statements (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These interim statements and related management’s discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the related notes and management’s discussion and analysis of results of operations, liquidity and capital resources included in our 2015 Annual Report on Form 10-K (“ 2015 Form 10-K”). These interim statements are unaudited. The year-end balance sheet data included in this Form 10-Q filing was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America. We have historically operated and continue to operate on a 52/53 week fiscal year ending on the Friday closest to the last day of the quarter. For ease of presentation, June 30 and December 31 are used consistently throughout this Form 10-Q and these interim financial statements and related notes to represent the period-end dates. For the 2016 and 2015 quarters, the actual closing dates were July 1, and July 3, respectively. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. When used herein, the terms “IFF,” the “Company,” “we,” “us” and “our” mean International Flavors & Fragrances Inc. and its consolidated subsidiaries. |
Reclassifications and Revisions | Reclassifications and Revisions Certain prior year amounts have been reclassified and revised to conform with current year presentation. The Consolidated Balance Sheet as of December 31, 2015, has been revised to properly reflect in-bound goods in transit. Accordingly, Inventory and Accounts payable decreased by $17.0 million . In addition, an adjustment has been made to two line items within net cash provided by operating activities for the 2015 Consolidated Statement of Cash Flows to reflect the previously recorded correction of a balance sheet classification associated with accounts payable and accruals. These adjustments were not material to the Consolidated Statement of Cash Flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which requires changes to several aspects of the accounting for share-based payment transactions, including the treatment of income tax consequences, classification of awards as either equity or liabilities, and classification of certain items on the statement of cash flows. This guidance will be effective for annual and interim periods beginning after December 15, 2016. Early adoption will be permitted for all entities. Among other changes, the standard requires that employee taxes paid when an employer withholds shares be presented in the Consolidated Statement of Cash Flows as a financing activity instead of an operating activity. The Company expects to adopt this change retroactively and that the impact on the Consolidated Statement of Cash Flows will be approximately $20 - $25 million on an annual basis. The Company is currently evaluating the other changes required by the standard. In February 2016, the FASB issued authoritative guidance which requires changes to the accounting for leases. The new guidance establishes a new lease accounting model, that, for all companies, requires entities to record assets and liabilities related to leases on the balance sheet for certain types of leases. The guidance will be effective for annual and interim periods beginning after December 31, 2018. Early adoption will be permitted for all entities. The Company expects the adoption of this guidance will result in significant increases to assets and liabilities on its Consolidated Balance Sheet and is still evaluating the impact on its Consolidated Statement of Comprehensive Income. In September 2015, the FASB issued authoritative guidance relating to the adjustments made during the measurement period for items in a business combination. Specifically, the new guidance requires adjustments related to the finalization of estimates to be recorded in the period when they are determined and to provide certain additional disclosures. This guidance is effective for fiscal years beginning after December 15, 2015. The Company adopted this guidance during 2016 and the adoption did not have a significant impact on its consolidated financial statements. In April 2015, the FASB issued authoritative guidance which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. This guidance is effective for annual and interim periods beginning after December 15, 2015. The Company adopted this guidance retroactively in 2016 and accordingly has reclassified all debt issuance costs on long-term debt as a direct deduction from the carrying amount of the debt liability in the Consolidated Balance Sheet as of December 31, 2015. The adoption of this guidance did not have a significant impact on its consolidated financial statements. In May 2014, the FASB issued authoritative guidance to clarify the principles to be used to recognize revenue and made subsequent clarifications under the new requirements during May 2016. The guidance is applicable to all entities and is effective for annual and interim periods beginning after December 15, 2017. Adoption as of the original effective date is permitted. The Company is currently evaluating the impact that this new standard will have on its consolidated financial statements. |
Accounts Receivable | Accounts Receivable The Company sells certain accounts receivable on a non-recourse basis to unrelated financial institutions under “factoring” agreements that are sponsored, solely and individually, by certain customers. The Company accounts for these transactions as sales of receivables, removes the receivables sold from its financial statements, and records cash proceeds when received by the Company. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of Shares Used in Computation of Basic and Diluted Net Income Per Share | A reconciliation of the shares used in the computation of basic and diluted net income per share is as follows: Three Months Ended June 30, Six Months Ended June 30, (SHARES IN THOUSANDS) 2016 2015 2016 2015 Basic 79,764 80,790 79,809 80,729 Assumed dilution under stock plans 276 402 332 472 Diluted 80,040 81,192 80,141 81,201 |
Goodwill and Other Intangible21
Goodwill and Other Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Movements in Goodwill | Movements in goodwill during 2016 were as follows: (DOLLARS IN THOUSANDS) Goodwill Balance at December 31, 2015 $ 941,389 Foreign exchange 3,229 Other (4,074 ) Balance at June 30, 2016 $ 940,544 |
Schedule of Other Intangible Assets, Net | Other intangible assets, net consist of the following amounts: June 30, December 31, (DOLLARS IN THOUSANDS) 2016 2015 Cost Customer relationships $ 289,743 $ 293,799 Trade names & patents 31,554 34,182 Technological know-how 111,808 112,393 Other 24,072 22,711 Total carrying value 457,177 463,085 Accumulated Amortization Customer relationships (74,061 ) (66,324 ) Trade names & patents (11,272 ) (10,282 ) Technological know-how (66,618 ) (65,258 ) Other (16,389 ) (15,217 ) Total accumulated amortization (168,340 ) (157,081 ) Other intangible assets, net $ 288,837 $ 306,004 |
Restructuring and Other Charg22
Restructuring and Other Charges, Net (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Changes in Employee-Related Restructuring Liabilities | Changes in employee-related restructuring liabilities during the six months ended June 30, 2016 , were as follows: (DOLLARS IN THOUSANDS) Employee-Related Costs Accelerated Depreciation Total Balance at December 31, 2015 $ 7,882 $ — $ 7,882 Additional charges (reversals), net — 283 283 Non-cash charges — (283 ) (283 ) Payments and other costs (1,446 ) — (1,446 ) Balance at June 30, 2016 $ 6,436 $ — $ 6,436 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Components of Debt | Debt consists of the following: (DOLLARS IN THOUSANDS) Rate Maturities June 30, 2016 December 31, 2015 Senior notes - 2006 (1) 6.14 % 2016 $ 124,991 $ 124,964 Senior notes - 2007 (1) 6.40 % 2017-27 499,618 499,618 Senior notes - 2013 (1) 3.20 % 2023 297,846 297,683 Euro Senior notes - 2016 (1) 1.75 % 2024 550,598 — Credit facility 2.67 % 2019 — 131,196 Bank overdrafts and other 15,791 10,982 Deferred realized gains on interest rate swaps 2,313 3,279 1,491,157 1,067,722 Less: Current portion of long-term debt (133,473 ) (132,349 ) $ 1,357,684 $ 935,373 |
Stock Compensation Plans (Table
Stock Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense and Related Tax Benefits | Stock-based compensation expense and related tax benefits were as follows: Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Equity-based awards $ 7,844 $ 7,473 $ 13,774 $ 12,860 Liability-based awards 1,739 666 2,332 2,573 Total stock-based compensation expense 9,583 8,139 16,106 15,433 Less: tax benefit (2,816 ) (2,225 ) (4,789 ) (4,412 ) Total stock-based compensation expense, after tax $ 6,767 $ 5,914 $ 11,317 $ 11,021 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | Reportable segment information is as follows: Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Net sales: Flavors $ 379,504 $ 372,478 $ 752,012 $ 749,586 Fragrances 413,974 395,063 824,777 792,862 Consolidated $ 793,478 $ 767,541 $ 1,576,789 $ 1,542,448 Segment profit: Flavors $ 90,337 $ 84,015 $ 182,151 $ 176,743 Fragrances 87,596 79,924 176,833 161,522 Global expenses (12,232 ) (8,629 ) (26,141 ) (20,194 ) Restructuring and other charges, net (1) (182 ) 358 (283 ) 170 Acquisition and related costs (2) (213 ) (6,566 ) (1,249 ) (7,066 ) Operational improvement initiative costs (3) (831 ) (281 ) (1,099 ) (562 ) Spanish capital tax settlement (4) — — 1,482 — Operating profit 164,475 148,821 331,694 310,613 Interest expense (15,060 ) (11,407 ) (27,539 ) (22,502 ) Other income (expense) 2,635 (436 ) 2,792 5,275 Income before taxes $ 152,050 $ 136,978 $ 306,947 $ 293,386 (1) Restructuring and other charges, net relate to accelerated depreciation costs in Europe recorded in Cost of goods sold. (2) Acquisition and related costs are associated with the 2015 acquisition of Lucas Meyer as discussed in Note 3, including inventory step-up charges related to the inventory acquired. (3) Operational improvement initiative costs relate to accelerated depreciation and severance costs in Asia in the 2016 period and accelerated depreciation in the 2015 period. (4) The Spanish capital tax settlement represents interest received from the Spanish government related to the reversal of the unfavorable ruling the Spanish capital tax case from 2002, which was reversed during the year ended December 31, 2015. |
Employee Benefits (Tables)
Employee Benefits (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Defined Contribution Retirement Plan Expenses | Pension and other defined contribution retirement plan expenses included the following components: U.S. Plans Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Service cost for benefits earned $ 772 $ 984 $ 1,543 $ 1,968 Interest cost on projected benefit obligation 6,006 5,954 12,013 11,907 Expected return on plan assets (8,070 ) (8,083 ) (16,139 ) (16,165 ) Net amortization and deferrals 1,385 5,203 2,772 10,406 Net periodic benefit cost 93 4,058 189 8,116 Defined contribution and other retirement plans 2,211 2,093 4,612 4,228 Total expense $ 2,304 $ 6,151 $ 4,801 $ 12,344 Non-U.S. Plans Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Service cost for benefits earned $ 3,863 $ 4,102 $ 7,638 $ 8,485 Interest cost on projected benefit obligation 6,372 6,151 12,737 12,543 Expected return on plan assets (11,985 ) (12,440 ) (23,934 ) (25,390 ) Net amortization and deferrals 3,286 3,314 6,550 6,801 Net periodic benefit cost 1,536 1,127 2,991 2,439 Defined contribution and other retirement plans 1,763 1,693 3,470 3,288 Total expense $ 3,299 $ 2,820 $ 6,461 $ 5,727 |
Postretirement Benefits Other Than Pension Expenses | Expense recognized for postretirement benefits other than pensions included the following components: Three Months Ended June 30, Six Months Ended June 30, (DOLLARS IN THOUSANDS) 2016 2015 2016 2015 Service cost for benefits earned $ 214 $ 301 $ 429 $ 601 Interest cost on projected benefit obligation 787 1,082 1,574 2,164 Net amortization and deferrals (1,355 ) (712 ) (2,710 ) (1,423 ) Total postretirement benefit (income) expense $ (354 ) $ 671 $ (707 ) $ 1,342 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Investments, All Other Investments [Abstract] | |
Carrying Amount and Estimated Fair Values of Financial Instruments | The amounts recorded in the balance sheet (carrying amount) and the estimated fair values of financial instruments at June 30, 2016 and December 31, 2015 consisted of the following: June 30, 2016 December 31, 2015 (DOLLARS IN THOUSANDS) Carrying Fair Carrying Fair Cash and cash equivalents (1) $ 539,992 $ 539,992 $ 181,988 $ 181,988 Credit facilities and bank overdrafts (2) 15,791 15,791 142,178 142,178 Long-term debt: (3) Senior notes - 2006 124,991 125,225 124,964 127,717 Senior notes - 2007 499,618 578,590 499,618 563,855 Senior notes - 2013 297,846 312,847 297,683 290,830 Euro Senior notes - 2016 550,598 584,953 — — (1) The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those instruments. (2) The carrying amount of our credit facilities and bank overdrafts approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments. (3) The fair value of our long-term debt was calculated using discounted cash flows applying current interest rates and current credit spreads based on our own credit risk. |
Derivative Instruments Notional Amount Outstanding | The following table shows the notional amount of the Company’s derivative instruments outstanding as of June 30, 2016 and December 31, 2015 : (DOLLARS IN THOUSANDS) June 30, 2016 December 31, 2015 Foreign currency contracts $ 805,900 $ 573,200 Interest rate swaps $ 475,000 $ 475,000 |
Derivative Instruments Measured at Fair Value | The following tables show the Company’s derivative instruments measured at fair value (Level 2 of the fair value hierarchy), as reflected in the Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 : June 30, 2016 (DOLLARS IN THOUSANDS) Fair Value of Fair Value of Total Fair Derivative assets (a) Foreign currency contracts $ 4,038 $ 12,159 $ 16,197 Interest rate swaps 4,341 — 4,341 $ 8,379 $ 12,159 $ 20,538 Derivative liabilities (b) Foreign currency contracts $ 1,353 $ 9,274 $ 10,627 $ 1,353 $ 9,274 $ 10,627 December 31, 2015 (DOLLARS IN THOUSANDS) Fair Value of Fair Value of Total Fair Derivative assets (a) Foreign currency contracts $ 6,560 $ 3,700 $ 10,260 Interest rate swaps 1,210 — 1,210 $ 7,770 $ 3,700 $ 11,470 Derivative liabilities (b) Foreign currency contracts $ 2,106 $ 3,022 $ 5,128 (a) Derivative assets are recorded to Prepaid expenses and other current assets in the Consolidated Balance Sheet. (b) Derivative liabilities are recorded as Other current liabilities in the Consolidated Balance Sheet. |
Derivative Instruments Which Were Not Designated as Hedging Instruments | The following table shows the effect of the Company’s derivative instruments which were not designated as hedging instruments in the Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2016 and 2015 (in thousands): Derivatives Not Designated as Hedging Instruments Amount of Gain (Loss) Location of Gain (Loss) Recognized in Income on Derivative Three Months Ended June 30, 2016 2015 Foreign currency contracts $ 1,395 $ 371 Other (income) expense, net Derivatives Not Designated as Hedging Instruments Amount of Gain (Loss) Location of Gain (Loss) Recognized in Income on Derivative Six Months Ended June 30, 2016 2015 Foreign currency contracts $ (3,548 ) $ 10,075 Other (income) expense, net |
Derivative Instruments Designated as Cash Flow and Net Investment Hedging Instruments | The following table shows the effect of the Company’s derivative instruments designated as cash flow and net investment hedging instruments in the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2016 and 2015 (in thousands): Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) Location of (Loss) Gain Reclassified from AOCI into Income (Effective Portion) Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) Three Months Ended June 30, Three Months Ended June 30, 2016 2015 2016 2015 Derivatives in Cash Flow Hedging Relationships: Foreign currency contracts $ 612 $ (6,035 ) Cost of goods sold $ 2,736 $ 3,561 Interest rate swaps (1) 171 69 Interest expense (171 ) (69 ) Derivatives in Net Investment Hedging Relationships: Foreign currency contracts 1,934 (1,030 ) N/A — — Euro Senior notes - 2016 9,649 — N/A — — Total $ 12,366 $ (6,996 ) $ 2,565 $ 3,492 Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) Location of (Loss) Gain Reclassified from AOCI into Income (Effective Portion) Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) Six Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Derivatives in Cash Flow Hedging Relationships: Foreign currency contracts $ (6,391 ) $ 5,979 Cost of goods sold $ 5,352 $ 4,584 Interest rate swaps (1) (3,001 ) 138 Interest expense (257 ) (138 ) Derivatives in Net Investment Hedging Relationships: Foreign currency contracts (470 ) 3,531 N/A — — Euro Senior notes - 2016 9,649 — N/A — — Total $ (213 ) $ 9,648 $ 5,095 $ 4,446 (1) Interest rate swaps were entered into as pre-issuance hedges. |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The following tables present changes in the accumulated balances for each component of other comprehensive income, including current period other comprehensive income and reclassifications out of accumulated other comprehensive income: Foreign Currency Translation Adjustments (Losses) Gains on Derivatives Qualifying as Hedges Pension and Postretirement Liability Adjustment Total (DOLLARS IN THOUSANDS) Accumulated other comprehensive (loss) income, net of tax, as of December 31, 2015 $ (297,499 ) $ 9,401 $ (325,342 ) $ (613,440 ) OCI before reclassifications 9,389 (4,297 ) — 5,092 Amounts reclassified from AOCI — (5,095 ) 5,133 38 Net current period other comprehensive income (loss) 9,389 (9,392 ) 5,133 5,130 Accumulated other comprehensive (loss) income, net of tax, as of June 30, 2016 $ (288,110 ) $ 9 $ (320,209 ) $ (608,310 ) Foreign Currency Translation Adjustments (Losses) Gains on Derivatives Qualifying as Hedges Pension and Postretirement Liability Adjustment Total (DOLLARS IN THOUSANDS) Accumulated other comprehensive (loss) income, net of tax, as of December 31, 2014 $ (173,342 ) $ 12,371 $ (379,459 ) $ (540,430 ) OCI before reclassifications (32,958 ) 10,563 — (22,395 ) Amounts reclassified from AOCI — (4,446 ) 11,023 6,577 Net current period other comprehensive income (loss) (32,958 ) 6,117 11,023 (15,818 ) Accumulated other comprehensive (loss) income, net of tax, as of June 30, 2015 $ (206,300 ) $ 18,488 $ (368,436 ) $ (556,248 ) |
Reclassifications of Accumulated Other Comprehensive Income to Consolidated Statement of Comprehensive Income | The following table provides details about reclassifications out of accumulated other comprehensive income to the Consolidated Statement of Comprehensive Income: Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 Affected Line Item in the (DOLLARS IN THOUSANDS) (Losses) gains on derivatives qualifying as hedges Foreign currency contracts $ 6,117 $ 5,239 Cost of goods sold Interest rate swaps (257 ) (138 ) Interest expense (765 ) (655 ) Provision for income taxes $ 5,095 $ 4,446 Total, net of income taxes (Losses) gains on pension and postretirement liability adjustments Prior service cost $ 3,735 $ 2,318 (a) Actuarial losses (10,347 ) (18,102 ) (a) 1,479 4,761 Provision for income taxes $ (5,133 ) $ (11,023 ) Total, net of income taxes (a) The amortization of prior service cost and actuarial loss is included in the computation of net periodic benefit cost. Refer to Note 14 of our 2015 Form 10-K for additional information regarding net periodic benefit cost. |
Consolidated Financial Statem29
Consolidated Financial Statements Consolidated Financial Statements (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Total Inventories | $ 584,489 | $ 572,047 | ||
Accounts payable | 255,143 | 285,501 | ||
Net cash provided by operating activities | 154,550 | $ 166,318 | ||
Net cash provided by (used in) financing activities | 253,125 | (46,967) | ||
Proceeds from sale of finance receivables | $ 17,700 | $ 1,300 | ||
Restatement Adjustment [Member] | Revision to Properly Reflect Inventory in Transit [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Total Inventories | (17,000) | |||
Accounts payable | $ (17,000) | |||
Scenario, Forecast [Member] | Accounting Standards Update 2016-09, Statutory Tax Withholding Component [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | Minimum [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Net cash provided by operating activities | $ 20,000 | |||
Net cash provided by (used in) financing activities | (20,000) | |||
Scenario, Forecast [Member] | Accounting Standards Update 2016-09, Statutory Tax Withholding Component [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | Maximum [Member] | ||||
New Accounting Pronouncement, Early Adoption [Line Items] | ||||
Net cash provided by operating activities | 25,000 | |||
Net cash provided by (used in) financing activities | $ (25,000) |
Net Income Per Share - Reconcil
Net Income Per Share - Reconciliation of Shares Used in Computation of Basic and Diluted Net Income Per Share (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Basic (shares) | 79,764 | 80,790 | 79,809 | 80,729 |
Assumed dilution under stock plans (shares) | 276 | 402 | 332 | 472 |
Diluted (shares) | 80,040 | 81,192 | 80,141 | 81,201 |
Net Income Per Share - Addition
Net Income Per Share - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income allocated to PRS | $ 0.3 | $ 0.5 | $ 0.5 | $ 1.1 |
Maximum [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Difference amount between basic and diluted net income per share | $ 0.01 | $ 0.01 | ||
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock excluded from computation of diluted net income per share | 0 | 0 | ||
Stock-Settled Appreciation Rights (SARs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock excluded from computation of diluted net income per share | 0 | 0 | 0 | 0 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands, € in Millions | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2015EUR (€) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Business Acquisition [Line Items] | ||||||
Cash paid for acquisition, net of cash received | $ 0 | $ 188,835 | ||||
Goodwill | $ 940,544 | $ 941,389 | ||||
Lucas Meyer [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of interests acquired | 100.00% | |||||
Total consideration for acquisition | € 284 | $ 312,100 | ||||
Cash Acquired from Acquisition | 4,800 | |||||
Cash paid for acquisition, net of cash received | 282.1 | 309,900 | ||||
Liability recorded for acquisition consideration | € 2 | 2,200 | ||||
Purchase price over carrying value of net assets | 290,100 | |||||
Intangible assets acquired | 156,400 | |||||
Goodwill | 179,500 | |||||
Deferred tax liabilities | $ 38,100 | |||||
Lucas Meyer [Member] | Trade Names and Proprietary Technology [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Acquired intangible assets useful life | 28 years | 28 years | ||||
Lucas Meyer [Member] | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Acquired intangible assets useful life | 23 years | 23 years | ||||
Lucas Meyer [Member] | Patents [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Acquired intangible assets useful life | 11 years | 11 years | ||||
Lucas Meyer [Member] | Non-solicitation Agreements [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Acquired intangible assets useful life | 3 years | 3 years | ||||
Henry H Ottens Manufacturing Co [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of interests acquired | 100.00% | 100.00% | ||||
Cash Acquired from Acquisition | $ 10,400 | |||||
Cash paid for acquisition, net of cash received | $ 198,900 |
Goodwill and Other Intangible33
Goodwill and Other Intangible Assets, Net - Schedule of Movements in Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance at December 31, 2015 | $ 941,389 |
Foreign exchange | 3,229 |
Other | (4,074) |
Balance at June 30, 2016 | $ 940,544 |
Restructuring and Other Charg34
Restructuring and Other Charges, Net - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($)Position | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charge | $ 0 | $ (358) | $ 0 | $ (170) | |
Fragrance Ingredients Rationalization [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charge | 283 | ||||
Payments for Restructuring and Other Costs | 1,446 | ||||
Expected restructuring costs | 11,000 | 11,000 | |||
Accelerated Depreciation [Member] | Fragrance Ingredients Rationalization [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charge | 283 | ||||
Payments for Restructuring and Other Costs | 0 | ||||
Restructuring, accelerated depreciation of fixed assets | $ 300 | ||||
Employee Severance [Member] | 2015 Severance Initiatives [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of positions expected to be eliminated | Position | 150 | ||||
Employee -Related Costs [Member] | Fragrance Ingredients Rationalization [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charge | 0 | ||||
Payments for Restructuring and Other Costs | $ 1,446 | ||||
Other Expense [Member] | Employee Severance [Member] | 2015 Severance Initiatives [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charge | $ 7,600 |
Goodwill and Other Intangible35
Goodwill and Other Intangible Assets, Net - Schedule of Other Intangible Assets, Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Total carrying value | $ 457,177 | $ 463,085 |
Total accumulated amortization | (168,340) | (157,081) |
Other intangible assets, net | 288,837 | 306,004 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total carrying value | 289,743 | 293,799 |
Total accumulated amortization | (74,061) | (66,324) |
Trade names & patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total carrying value | 31,554 | 34,182 |
Total accumulated amortization | (11,272) | (10,282) |
Technological know-how | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total carrying value | 111,808 | 112,393 |
Total accumulated amortization | (66,618) | (65,258) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total carrying value | 24,072 | 22,711 |
Total accumulated amortization | $ (16,389) | $ (15,217) |
Restructuring and Other Charg36
Restructuring and Other Charges, Net - Changes in Employee-Related Restructuring Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Restructuring Reserve [Roll Forward] | ||||
Additional charges (reversals), net | $ 0 | $ (358) | $ 0 | $ (170) |
Fragrance Ingredients Rationalization [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 7,882 | |||
Additional charges (reversals), net | 283 | |||
Non-cash charges | (283) | |||
Payments and other costs | (1,446) | |||
Ending Balance | 6,436 | 6,436 | ||
Fragrance Ingredients Rationalization [Member] | Employee -Related Costs [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 7,882 | |||
Additional charges (reversals), net | 0 | |||
Non-cash charges | 0 | |||
Payments and other costs | (1,446) | |||
Ending Balance | 6,436 | 6,436 | ||
Fragrance Ingredients Rationalization [Member] | Accelerated Depreciation [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 0 | |||
Additional charges (reversals), net | 283 | |||
Non-cash charges | (283) | |||
Payments and other costs | 0 | |||
Ending Balance | $ 0 | $ 0 |
Goodwill and Other Intangible37
Goodwill and Other Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of acquisition-related intangibles | $ 5,130 | $ 3,040 | $ 11,191 | $ 4,880 |
Estimated annual amortization, 2016 | 21,800 | 21,800 | ||
Estimated annual amortization, 2017 | 21,400 | 21,400 | ||
Estimated annual amortization, 2018 | 21,200 | 21,200 | ||
Estimated annual amortization, 2019 | 20,000 | 20,000 | ||
Estimated annual amortization, 2020 | 19,300 | 19,300 | ||
Estimated annual amortization, 2021 | $ 15,100 | $ 15,100 |
Borrowings - Components of Debt
Borrowings - Components of Debt (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Mar. 14, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Total debt | $ 1,491,157 | $ 1,067,722 | |
Less: Current portion of long-term debt | (133,473) | (132,349) | |
Total long-term debt | $ 1,357,684 | 935,373 | |
Senior Notes 2006 [Member] | |||
Debt Instrument [Line Items] | |||
Rate | 6.14% | ||
Maturities | 2,016 | ||
Credit facilities | $ 124,991 | 124,964 | |
Senior Notes 2007 [Member] | |||
Debt Instrument [Line Items] | |||
Rate | 6.40% | ||
Maturities | 2017-27 | ||
Credit facilities | $ 499,618 | 499,618 | |
Senior Notes 2007 [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Maturities | 2,017 | ||
Senior Notes 2007 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Maturities | 2,027 | ||
Senior Notes 2013 [Member] | |||
Debt Instrument [Line Items] | |||
Rate | 3.20% | ||
Maturities | 2,023 | ||
Credit facilities | $ 297,846 | 297,683 | |
Senior Notes 2016 [Member] | |||
Debt Instrument [Line Items] | |||
Rate | 1.75% | 1.75% | |
Maturities | 2,024 | ||
Credit facilities | $ 550,598 | 0 | |
Revolver Borrowings [Member] | |||
Debt Instrument [Line Items] | |||
Rate | 2.67% | ||
Maturities | 2,019 | ||
Credit facilities | $ 0 | 131,196 | |
Bank overdrafts and other [Member] | |||
Debt Instrument [Line Items] | |||
Bank overdrafts and other | 15,791 | 10,982 | |
Deferred realized gains on interest rate swaps [Member] | |||
Debt Instrument [Line Items] | |||
Deferred realized gains on interest rate swaps | $ 2,313 | $ 3,279 |
Borrowings Narrative (Details)
Borrowings Narrative (Details) | Jul. 12, 2016USD ($) | Mar. 14, 2016EUR (€) | Jun. 30, 2016USD ($) | Mar. 14, 2016USD ($) |
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ | $ 950,000,000 | |||
Loss upon settlement of hedges | $ | $ 3,200,000 | |||
Senior Notes 2016 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt face amount | € | € 500,000,000 | |||
Debt instrument stated rate (percent) | 1.75% | 1.75% | 1.75% | |
Debt discount | € | € 900,000 | |||
Proceeds from debt issuance | € | 496,000,000 | |||
Debt underwriting discount | € | € 3,100,000 | |||
Other deferred financing costs | $ | $ 1,300,000 | |||
Debt instrument, term | 8 years | |||
Notice period for redemption | 30 days | |||
Repurchase price of the principal amount outstanding (percent) | 101.00% | |||
Senior Notes 2006 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument stated rate (percent) | 6.14% | |||
Senior Notes 2006 [Member] | Subsequent Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayment of debt | $ | $ 125,000,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Taxes [Line Items] | ||||
Tax settlement | $ 10.5 | |||
Spanish tax settlement [Member] | ||||
Income Taxes [Line Items] | ||||
Effective tax rate | 23.20% | 23.10% | 23.30% | 20.40% |
Foreign Tax Authority [Member] | ||||
Income Taxes [Line Items] | ||||
Provision for uncertain tax positions | $ 26 | $ 26 | ||
2007-2012 [Member] | Minimum [Member] | ||||
Income Taxes [Line Items] | ||||
Income tax examination, years under examination | 2,006 | |||
2007-2012 [Member] | Maximum [Member] | ||||
Income Taxes [Line Items] | ||||
Income tax examination, years under examination | 2,015 | |||
Other Liabilities [Member] | ||||
Income Taxes [Line Items] | ||||
Unrecognized tax benefits that would impact effective tax rate | 25.1 | $ 25.1 | ||
Accrued interest and penalties | $ 0.9 | $ 0.9 |
Stock Compensation Plans - Stoc
Stock Compensation Plans - Stock-Based Compensation Expense and Related Tax Benefits (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 9,583 | $ 8,139 | $ 16,106 | $ 15,433 |
Less: tax benefit | (2,816) | (2,225) | (4,789) | (4,412) |
Total stock-based compensation expense, after tax | 6,767 | 5,914 | 11,317 | 11,021 |
Equity-based awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 7,844 | 7,473 | 13,774 | 12,860 |
Liability-based awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 1,739 | $ 666 | $ 2,332 | $ 2,573 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)segment | Jun. 30, 2015USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Number of segments | segment | 2 | |||
US | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | $ 185 | $ 174 | $ 365 | $ 338 |
Foreign Countries | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | $ 608 | $ 594 | $ 1,212 | $ 1,204 |
Sales [Member] | Foreign Countries | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Maximum percentage of total consolidated net sales attributed to any non-U.S. country | 10.00% |
Segment Information - Reportabl
Segment Information - Reportable Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Net sales: | |||||
Net sales | $ 793,478 | $ 767,541 | $ 1,576,789 | $ 1,542,448 | |
Segment profit: | |||||
Operating profit | 164,475 | 148,821 | 331,694 | 310,613 | |
Interest expense | (15,060) | (11,407) | (27,539) | (22,502) | |
Other income, net | 2,635 | (436) | 2,792 | 5,275 | |
Income before taxes | 152,050 | 136,978 | 306,947 | 293,386 | |
Flavors [Member] | |||||
Net sales: | |||||
Net sales | 379,504 | 372,478 | 752,012 | 749,586 | |
Segment profit: | |||||
Operating profit | 90,337 | 84,015 | 182,151 | 176,743 | |
Fragrances [Member] | |||||
Net sales: | |||||
Net sales | 413,974 | 395,063 | 824,777 | 792,862 | |
Segment profit: | |||||
Operating profit | 87,596 | 79,924 | 176,833 | 161,522 | |
Global expenses [Member] | |||||
Segment profit: | |||||
Operating profit | (12,232) | (8,629) | (26,141) | (20,194) | |
Restructuring and other charges, net | |||||
Segment profit: | |||||
Operating profit | [1] | (182) | 358 | (283) | 170 |
Acquisition and related costs | |||||
Segment profit: | |||||
Operating profit | [2] | (213) | (6,566) | (1,249) | (7,066) |
Operational improvement initiative costs | |||||
Segment profit: | |||||
Operating profit | [3] | (831) | (281) | (1,099) | (562) |
Spanish capital tax settlement | |||||
Segment profit: | |||||
Operating profit | [4] | $ 0 | $ 0 | $ 1,482 | $ 0 |
[1] | Restructuring and other charges, net relate to accelerated depreciation costs in Europe recorded in Cost of goods sold. | ||||
[2] | Acquisition and related costs are associated with the 2015 acquisition of Lucas Meyer as discussed in Note 3, including inventory step-up charges related to the inventory acquired | ||||
[3] | Operational improvement initiative costs relate to accelerated depreciation and severance costs in Asia in the 2016 period and accelerated depreciation in the 2015 period. | ||||
[4] | The Spanish capital tax settlement represents interest received from the Spanish government related to the reversal of the unfavorable ruling the Spanish capital tax case from 2002, which was reversed during the year ended December 31, 2015. |
Employee Benefits - Pension and
Employee Benefits - Pension and Other Defined Contribution Retirement Plan Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
U.S. Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost for benefits earned | $ 772 | $ 984 | $ 1,543 | $ 1,968 |
Interest cost on projected benefit obligation | 6,006 | 5,954 | 12,013 | 11,907 |
Expected return on plan assets | (8,070) | (8,083) | (16,139) | (16,165) |
Net amortization and deferrals | 1,385 | 5,203 | 2,772 | 10,406 |
Total postretirement benefit (income) expense | 93 | 4,058 | 189 | 8,116 |
Total expense | 2,304 | 6,151 | 4,801 | 12,344 |
Non-U.S. Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost for benefits earned | 3,863 | 4,102 | 7,638 | 8,485 |
Interest cost on projected benefit obligation | 6,372 | 6,151 | 12,737 | 12,543 |
Expected return on plan assets | (11,985) | (12,440) | (23,934) | (25,390) |
Net amortization and deferrals | 3,286 | 3,314 | 6,550 | 6,801 |
Total postretirement benefit (income) expense | 1,536 | 1,127 | 2,991 | 2,439 |
Total expense | 3,299 | 2,820 | 6,461 | 5,727 |
United States Postretirement Benefit Plan of US Entity [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution and other retirement plans | 2,211 | 2,093 | 4,612 | 4,228 |
Non-U.S. Pension Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution and other retirement plans | $ 1,763 | $ 1,693 | $ 3,470 | $ 3,288 |
Employee Benefits - Additional
Employee Benefits - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Non-Qualified U.S. Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contribution to the plans | $ 2.2 |
Non-U.S. Pension Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contribution to the plans | 17.3 |
U.S. Pension Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Contribution to the plans | 20 |
Postretirement Benefit Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to the plan | 5 |
Contribution to other postretirement plans | 2.6 |
Maximum [Member] | Non-U.S. Pension Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to the plan | $ 30 |
Employee Benefits - Postretirem
Employee Benefits - Postretirement Benefits Other Than Pension Expenses (Detail) - Postretirement Benefit Plan [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost for benefits earned | $ 214 | $ 301 | $ 429 | $ 601 |
Interest cost on projected benefit obligation | 787 | 1,082 | 1,574 | 2,164 |
Net amortization and deferrals | (1,355) | (712) | (2,710) | (1,423) |
Total postretirement benefit (income) expense | $ (354) | $ 671 | $ (707) | $ 1,342 |
Financial Instruments - Carryin
Financial Instruments - Carrying Amount and Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | |
Reported Value Measurement [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents, at fair value | [1] | $ 539,992 | $ 181,988 |
Credit facilities and bank overdrafts | [2] | 15,791 | 142,178 |
Reported Value Measurement [Member] | Senior Notes 2006 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior Notes, Noncurrent | [3] | 124,991 | 124,964 |
Reported Value Measurement [Member] | Senior Notes 2007 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior Notes, Noncurrent | [3] | 499,618 | 499,618 |
Reported Value Measurement [Member] | Senior Notes 2013 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior Notes, Noncurrent | [3] | 297,846 | 297,683 |
Reported Value Measurement [Member] | Senior Notes 2016 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior Notes, Noncurrent | [3] | 550,598 | 0 |
Estimate of Fair Value Measurement [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and cash equivalents, at fair value | [1] | 539,992 | 181,988 |
Credit facilities and bank overdrafts | [2] | 15,791 | 142,178 |
Estimate of Fair Value Measurement [Member] | Senior Notes 2006 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior Notes, Noncurrent | [3] | 125,225 | 127,717 |
Estimate of Fair Value Measurement [Member] | Senior Notes 2007 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior Notes, Noncurrent | [3] | 578,590 | 563,855 |
Estimate of Fair Value Measurement [Member] | Senior Notes 2013 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior Notes, Noncurrent | [3] | 312,847 | 290,830 |
Estimate of Fair Value Measurement [Member] | Senior Notes 2016 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior Notes, Noncurrent | [3] | $ 584,953 | $ 0 |
[1] | The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those instruments. | ||
[2] | The carrying amount of our credit facilities and bank overdrafts approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments. | ||
[3] | The fair value of our long-term debt was calculated using discounted cash flows applying current interest rates and current credit spreads based on our own credit risk. |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) € in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016EUR (€)contract | Jun. 30, 2016USD ($)contract | Jun. 30, 2016USD ($)contract | Mar. 31, 2016swap | |
Derivative [Line Items] | ||||
Derivative losses included in AOCI | $ 1,700,000 | |||
Net investment hedge ineffectiveness | 0 | $ 0 | ||
Cash flow hedge ineffectiveness | 0 | $ 0 | ||
Foreign Exchange Forward [Member] | ||||
Derivative [Line Items] | ||||
Term of derivative | 12 months | |||
Interest rate swaps [Member] | Swap [Member] | ||||
Derivative [Line Items] | ||||
Number of derivatives (swap) | swap | 2 | |||
Number of instruments terminated (swap) | swap | 2 | |||
Loss on settlement of derivatives | € (2.9) | $ 3,200,000 | ||
Net Investment Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | ||||
Derivative [Line Items] | ||||
Remaining maturity term | 1 year | |||
Number of derivatives matured (contract) | contract | 8 | 8 | 8 |
Financial Instruments - Derivat
Financial Instruments - Derivative Instruments Notional Amount Outstanding (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Foreign currency contracts [Member] | ||
Schedule Of Information By Major Category Of Credit Derivatives Contracts [Line Items] | ||
Derivative instruments outstanding | $ 805,900 | $ 573,200 |
Interest rate swaps [Member] | ||
Schedule Of Information By Major Category Of Credit Derivatives Contracts [Line Items] | ||
Derivative instruments outstanding | $ 475,000 | $ 475,000 |
Financial Instruments - Deriv50
Financial Instruments - Derivative Instruments Measured at Fair Value (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | |
Derivatives, Fair Value [Line Items] | |||
Total Fair Value, Derivative Assets | [1] | $ 20,538 | $ 11,470 |
Total Fair Value, Derivative Liabilities | [2] | 10,627 | |
Foreign currency contracts [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Fair Value, Derivative Assets | [1] | 16,197 | 10,260 |
Total Fair Value, Derivative Liabilities | [2] | 10,627 | 5,128 |
Interest rate swaps [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Fair Value, Derivative Assets | [1] | 4,341 | 1,210 |
Fair Value of Derivatives Designated as Hedging Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Fair Value, Derivative Assets | [1] | 8,379 | 7,770 |
Total Fair Value, Derivative Liabilities | [2] | 1,353 | |
Fair Value of Derivatives Designated as Hedging Instruments [Member] | Foreign currency contracts [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Fair Value, Derivative Assets | [1] | 4,038 | 6,560 |
Total Fair Value, Derivative Liabilities | [2] | 1,353 | 2,106 |
Fair Value of Derivatives Designated as Hedging Instruments [Member] | Interest rate swaps [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Fair Value, Derivative Assets | [1] | 4,341 | 1,210 |
Fair Value of Derivatives Not Designated as Hedging Instruments [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Fair Value, Derivative Assets | [1] | 12,159 | 3,700 |
Total Fair Value, Derivative Liabilities | [2] | 9,274 | |
Fair Value of Derivatives Not Designated as Hedging Instruments [Member] | Foreign currency contracts [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Fair Value, Derivative Assets | [1] | 12,159 | 3,700 |
Total Fair Value, Derivative Liabilities | [2] | 9,274 | 3,022 |
Fair Value of Derivatives Not Designated as Hedging Instruments [Member] | Interest rate swaps [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Total Fair Value, Derivative Assets | [1] | $ 0 | $ 0 |
[1] | Derivative assets are recorded to Prepaid expenses and other current assets in the Consolidated Balance Sheet. | ||
[2] | Derivative liabilities are recorded as Other current liabilities in the Consolidated Balance Sheet. |
Financial Instruments - Deriv51
Financial Instruments - Derivative Instruments Which Were Not Designated as Hedging Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Not Designated as Hedging Instrument [Member] | Foreign currency contracts [Member] | Other income (expense), net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Recognized in Income on Derivative | $ 1,395 | $ 371 | $ (3,548) | $ 10,075 |
Financial Instruments - Deriv52
Financial Instruments - Derivative Instruments Designated as Cash Flow and Net Investment Hedging Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) | $ 12,366 | $ (6,996) | $ (213) | $ 9,648 | |
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | 2,565 | 3,492 | 5,095 | 4,446 | |
Foreign currency contracts [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) | 612 | (6,035) | (6,391) | 5,979 | |
Foreign currency contracts [Member] | Derivatives in Net Investment Hedging Relationships [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) | 1,934 | (1,030) | (470) | 3,531 | |
Foreign currency contracts [Member] | Cost of goods sold [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | 2,736 | 3,561 | 5,352 | 4,584 | |
Interest rate swaps [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) | [1] | 171 | 69 | (3,001) | 138 |
Interest rate swaps [Member] | Interest expense [Member] | Derivatives in Cash Flow Hedging Relationships [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion) | [1] | (171) | (69) | (257) | (138) |
Senior Notes 2016 [Member] | Derivatives in Net Investment Hedging Relationships [Member] | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion) | $ 9,649 | $ 0 | $ 9,649 | $ 0 | |
[1] | Interest rate swaps were entered into as pre-issuance hedges. |
Accumulated Other Comprehensi53
Accumulated Other Comprehensive Income (Loss) - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Accumulated other comprehensive loss (income), net of tax, beginning balance | $ (613,440) | $ (540,430) | ||
OCI before reclassifications | 5,092 | (22,395) | ||
Amounts reclassified from AOCI | 38 | 6,577 | ||
Net current period other comprehensive income (loss) | $ (1,311) | $ 17,067 | 5,130 | (15,818) |
Accumulated other comprehensive loss (income), net of tax, ending balance | (608,310) | (556,248) | (608,310) | (556,248) |
Accumulated Translation Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Accumulated other comprehensive loss (income), net of tax, beginning balance | (297,499) | (173,342) | ||
OCI before reclassifications | 9,389 | (32,958) | ||
Amounts reclassified from AOCI | 0 | 0 | ||
Net current period other comprehensive income (loss) | 9,389 | (32,958) | ||
Accumulated other comprehensive loss (income), net of tax, ending balance | (288,110) | (206,300) | (288,110) | (206,300) |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Accumulated other comprehensive loss (income), net of tax, beginning balance | 9,401 | 12,371 | ||
OCI before reclassifications | (4,297) | 10,563 | ||
Amounts reclassified from AOCI | (5,095) | (4,446) | ||
Net current period other comprehensive income (loss) | (9,392) | 6,117 | ||
Accumulated other comprehensive loss (income), net of tax, ending balance | 9 | 18,488 | 9 | 18,488 |
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Accumulated other comprehensive loss (income), net of tax, beginning balance | (325,342) | (379,459) | ||
OCI before reclassifications | 0 | 0 | ||
Amounts reclassified from AOCI | 5,133 | 11,023 | ||
Net current period other comprehensive income (loss) | 5,133 | 11,023 | ||
Accumulated other comprehensive loss (income), net of tax, ending balance | $ (320,209) | $ (368,436) | $ (320,209) | $ (368,436) |
Accumulated Other Comprehensi54
Accumulated Other Comprehensive Income (Loss) - Reclassifications of Accumulated Other Comprehensive Income to Consolidated Statement of Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Schedule Of Reclassification Of Accumulated Other Comprehensive Income Loss [Line Items] | |||||
(Losses) gains on derivatives qualifying as hedges, net of tax | $ 5,095 | $ 4,446 | |||
Prior service cost | [1] | 3,735 | 2,318 | ||
Actuarial losses | [1] | (10,347) | (18,102) | ||
(Losses) gains on pension and postretirement liability adjustments, net of tax | $ (2,578) | $ (5,476) | (5,133) | (11,023) | |
Cost of goods sold [Member] | Foreign currency contracts [Member] | |||||
Schedule Of Reclassification Of Accumulated Other Comprehensive Income Loss [Line Items] | |||||
(Losses) gains on derivatives qualifying as hedges | 6,117 | 5,239 | |||
Interest expense [Member] | Interest rate swaps [Member] | |||||
Schedule Of Reclassification Of Accumulated Other Comprehensive Income Loss [Line Items] | |||||
(Losses) gains on derivatives qualifying as hedges | (257) | (138) | |||
Provision for income taxes [Member] | |||||
Schedule Of Reclassification Of Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Provision for income taxes for (Losses) gains on derivatives qualifying as hedges | (765) | (655) | |||
Provision for income taxes for gains (Losses) on pension and postretirement liability adjustments | $ 1,479 | $ 4,761 | |||
[1] | The amortization of prior service cost and actuarial loss is included in the computation of net periodic benefit cost. Refer to Note 14 of our 2015 Form 10-K for additional information regarding net periodic benefit cost. |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) € in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2016USD ($) | Mar. 31, 2014EUR (€) | Mar. 31, 2014USD ($) | Jun. 30, 2016USD ($)property | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | |
Commitments And Contingencies [Line Items] | ||||||||
Bank guarantees related to appeals on income tax and indirect tax cases | $ 16,200,000 | |||||||
Available lines of credit | $ 76,600,000 | $ 76,600,000 | ||||||
Duration as potentially responsible party, years | 20 years | |||||||
Number of facilities under potentially responsible party investigation | property | 8 | |||||||
Estimation of possible loss | 5,000,000 | $ 5,000,000 | ||||||
Payments to acquire equipment | $ 6,500,000 | |||||||
Property, Plant and Equipment, Net | 737,353,000 | 737,353,000 | $ 732,794,000 | |||||
Bank guarantees and pledged assets to pursue defenses related to other contingencies | 29,600,000 | |||||||
Estimate range of possible loss from other contingencies, minimum | 0 | 0 | ||||||
Estimate range of possible loss from other contingencies, maximum | 46,000,000 | 46,000,000 | ||||||
Payment of Litigation Settlement | € | € 9.8 | |||||||
Bank guarantees and standby letters of credit [Member] | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Bank guarantees and letters of credit outstanding | 38,000,000 | |||||||
Pledged assets [Member] | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
The amount of pledged assets, principally PP&E to cover income tax and indirect tax assessments | 13,400,000 | |||||||
Spanish capital tax settlement | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Payment of Litigation Settlement | $ 11,200,000 | |||||||
Estimated Litigation Liability | € (9.8) | $ (10,500,000) | ||||||
Additional income recorded related to amounts to be received | 1,400,000 | |||||||
Zhejiang Ingredients Plant [Member] | CHINA | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Property, Plant and Equipment, Net | $ 25,000,000 | $ 25,000,000 | ||||||
Scenario, Forecast [Member] | Minimum [Member] | Zhejiang Ingredients Plant [Member] | CHINA | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Restructuring, accelerated depreciation of fixed assets | $ 0 | |||||||
Scenario, Forecast [Member] | Maximum [Member] | Zhejiang Ingredients Plant [Member] | CHINA | ||||||||
Commitments And Contingencies [Line Items] | ||||||||
Restructuring, accelerated depreciation of fixed assets | $ 25,000,000 |